Watson’s Daily: US-China trade war and South African insurer, Vitality
US-China Trade war
As we head into the US midterm elections this week where we marvel at Trump’s admiration for “beautiful barbed wire”, both corporate America and China are still adjusting to the trade war tariffs currently in place as there are winners and losers on both sides.
On the American side, for every Caterpillar that’s doing well because they’ve got manufacturing on both sides of the trade divide, there are US timber and grain companies who are suddenly suffering.
On the China side, you’ve got companies like Alibaba who are cutting their revenue forecasts because of a China slowdown that hasn’t been helped by imposition of taxes on both sides.
Funnily enough, Alibaba’s founder Jack Ma said that he believed the trade wars could go on for two decades and that both sides would suffer.
Although I think that is a bit of an exaggeration, it IS going to be tough to get both sides to agree on some kind of deal.
I think that China will be able to play the waiting game longer than the US because it can fudge its numbers much more easily than the Americans.
So, for instance, in order to avoid handing Trump a victory of sorts by falling short of its year-end GDP growth target I would be willing to bet a small sum that China will miraculously hit the target despite the recent slowdown.
Trump, on the other hand, will find it harder to fiddle the numbers so will probably want to get a deal sooner rather than later.
Vitality
The other thing I wanted to talk about today was South African insurer Vitality, which is a subsidiary of the £6bn South African insurer Discovery.
It is starting to use data recorded by devices including Fitbits and Apple Watches to price up health insurance with incentives going to those who take positive steps to improve their lifestyle.
Incentives include things like Starbucks coffees, monthly subscriptions to Amazon Prime and tickets to Premier League football matches.
I think that this is an interesting and understandable development which will presumably attract fewer “at risk” consumers meaning less payouts.
The only thing is it does seem a bit creepy that an insurance company can look at this kind of data. Still, given that insurers use telematics to monitor car drivers in return from lower premiums it seems like a logical next step to transfer this to humans!